Cloud Security Provider Bitglass Boosts Its Bank Account

Cloud services keep getting more popular. But they pose some new security issues, creating an opening for companies like Bitglass to become a new kind of middleman.

The Silicon Valley startup, founded in 2013, on Tuesday is announcing a second funding round totaling $25 million. Contributors include an unnamed global bank and an investing arm of SingTel Group, the big Asian mobile communications carrier.

CEO Nat Kausik, a veteran of several prior tech startups, says companies love the convenience of cloud-based software providers like Salesforce.com and storage services like Box. But many are uneasy about their sensitive data being stored outside their own premises–fears exacerbated by high-profile security breaches and surveillance activities by the National Security Agency.

“As companies want to go to the cloud, they get worried about it,” Kausik said in a recent interview.

At the same time, companies are eager to make sure that mobile devices their employees use–either purchased by them or supplied by their companies–aren’t compromised by security holes.

Bitglass tries to tackle both issues by establishing a service that sits between a company’s own computer network and the servers operated by an external cloud service. It also acts as an intermediary between mobile devices and such online services.

From that position, Bitglass can monitor employee activity and set parameters on what data or documents they can access under what circumstances, said Rich Campagna, the company’s vice president of product and marketing. Those features secure data on employee smartphones, tablets and laptops without having to individual install security software on them, a chore companies like to avoid, he said.

The company also recently added an option for customers to encrypt data they generate when it is stored at cloud services–or, if they are particularly security-conscious, allow them to keep the data on their own premises while still making use of online software, he said.

Encryption, while a widely used technology, can make it difficult to search through data. Bitglass says it has applied for patents on its encrypted-search technology.

Bitglass, which first disclosed its plans in January, says it has seen interest from customers in healthcare, manufacturing, transportation, banks and other financial services. Campagna wouldn’t say whether the unnamed investor bank is a user of Bitglass services. “Of course, it’s of interest to them,” he said.

The latest funding round, which brings the total raised by the startup to date to $35 million, also includes contributions by prior venture-capital investors New Enterprise Associates and Norwest.